From failing to secure headlines for a client to a major printing error (fixed before the client even found out about it), Suzy Kemble shares a number of claims against media companies, as well as how we handled them.
In the unfortunate event that your client needs to make a claim, it will be handled by a dedicated media specialist in our claims team. Below are some claim scenarios illustrating how Hiscox Professional Indemnity Insurance for the marketing, advertising and communications sector could help protect both you and your client.
Imitation isn’t the sincerest form of flattery
– what happens when a famous photographer’s estate claims an infringement of copyright?
A well-known fashion brand asked our advertising agency client to deliver a creative ad campaign. Following the campaign launch, the fashion brand received a complaint from the estate of a famous fashion photographer who claimed that there were distinct similarities between the ad campaign and the work of the photographer.
Under British legal jurisdiction, the similarities were not seen as sufficient to cause any infringement of copyright. Unfortunately for the advertising agency, the photographer’s estate threatened to take the case to a European court with a reputation for protecting the intellectual property of its nationals, a move that would almost certainly result in our client losing the case.
We used our in-house legal expertise to find the best possible solution and successfully navigate what could have been a lengthy and unsuccessful legal battle. Hiscox helped to mediate negotiations between the advertising agency and claimant lawyers, leading to an agreed settlement of €50,000.
You can’t film here!
– how a commercial film producer’s failure to secure the necessary permission threatened an advertising campaign
Advertising campaigns can be a legal minefield. In this one, our commercial film production client was asked to shoot an advert for a large photographic company and chose a visually exciting cultural festival as the backdrop.
Permission was given to film but, due to a misunderstanding of filming rights, footage was taken of some performers at the festival who had not given their express permission for filming, and were not happy that they featured heavily in the advert.
We covered the costs of settling the claim, including damages paid to the performers and legal costs incurred by the production company. This meant that the advert could continue to run, and avoided further legal procedures.
Happy Christmas (unless your TV advert goes wrong)
– the film might be ‘in the can’, but what if a big error shows up after the performer has packed up and gone home?
Mix a well-known reality TV star with a large retailer, costume changes, and a big TV Christmas campaign and what could possibly go wrong? Unfortunately for our production company client, problems resulted in additional costs of well over £130K.
The brief was to make a series of TV adverts using a well-known reality TV star. The filming went ahead and our client, conscious of keeping costs down, decided to shoot many different scenes out of sequence on the same day. So far so good, but after the filming had been completed a serious error in continuity became apparent, with the TV star seen wearing two different outfits within one 30-second advert.
One possible solution was to use one of the world’s leading CGI special effect houses to digitally alter the incorrect outfit and dub in the correct outfit. The production company was happy with this, but the retailer wasn’t convinced and indicated that they still might reject the CGI solution if they weren’t happy with the end result. This would leave the production company without enough time for a re-shoot.
To preserve the relationship between the production company and its client, Hiscox agreed to a complete re-shoot of the advert – a more expensive solution than was strictly necessary to correct the error – incurring additional production costs and compensation for the TV star who had to work on their only day off between other commitments.
We understand that mistakes can happen and that maintaining commercial relationships with their clients is a priority for our marketing and media clients. Our experience and expertise in the media industry means that if something does go wrong, we can help our clients reach the best possible solution.
You can’t always get what you want
– what if you don’t get the headlines your client demands?
A legal firm, keen to raise its profile, contracted our client – a PR agency– to try and secure coverage in various legal directories. The PR agency set up a number of interviews with the directories which all passed off successfully.
Unfortunately, despite a follow-up from the PR agency, none of the directories considered the legal firm big enough to be included. A PR firm can’t guarantee to secure media coverage, but the law firm thought otherwise and decided to issue legal proceedings.
It would have been cheaper to settle the claim because legal costs would not usually be recovered in this level of court. However, where our insured is not at fault and there is a point of principle at stake, we are much more likely to aggressively defend the claim with a view to vindicating our insured. So we backed our client’s position and appointed legal counsel who managed to get the claim thrown out, as well as securing an unusually large costs award in favour of our insured.
Return to sender
– typos and misprints lead to costly consequences for a council’s mailshot
A local council asked our client, a direct marketing agency, to prepare two different versions of a mailshot to local residents. Unfortunately, during the print stage, the versions of the letter were mixed up meaning everyone received an incorrect version.
Fortunately 30,000 letters were stopped before they went out, but the mix up hadn’t been noticed in time to stop 60,000 inaccurate mailings. This led to 2,500 complaints from residents, forcing the council to take on extra resource to manage the problem.
Our client notified us of the problem immediately and we were able to settle the claim amicably within a week, preserving the direct marketing agency’s relationship with the council. The settlement involved reprinting the 30,000 letters which had not been sent out as well as covering the print and mailing costs (which the council refused to pay) for the larger, incorrect mailing which had been sent to 60,000 residents.
– even if a client’s instructions are misinterpreted, the client relationship can still be saved
An advertising agency provided services to a US retail chain that had booked a prime-time advert for eight weeks on a major UK TV channel.
The agency’s role was to send a copy of the ad placement instructions to the TV channel, but unfortunately the instructions provided to the agency by their client were subsequently, and incorrectly, altered by one of the agency’s employees. This led to the advertisement only being broadcast for four of the intended eight weeks.
The agency was liable; their employee’s error was the cause of the agency’s failure to include the prime-time ads in the booking schedule for weeks four to eight.
This was a blow to the client in what was one of its most important ad campaigns of the year. The client estimated its losses in excess of $3million. However, following some detailed and difficult negotiations, the Hiscox claims manager agreed to pay the settlement costs of $750,000.
As with so many of the claims that we handle, the agency and its client had a strong ongoing commercial relationship that they needed to maintain whilst working through the negotiations to achieve a settlement that everyone felt was fair. Our experience of handling claims against advertising agencies meant that we were able to achieve this in spite of the difficult negotiations. The agency and its client were able to draw a line under the event keeping their strong commercial relationship intact.
Pulp the print
– a major printing error is rectified before our client’s customer even knows there is a problem
Our client, a creative agency, notified Hiscox’s claims team of a serious design mistake which meant that a print run of nearly half a million high-end brochures would be unusable. To protect their client relationship, the agency was keen to resolve the situation without their client being made aware that there was an issue. With the brochures due for delivery to the end client just over a week later, time was of the essence.
Hiscox supported the creative agency to help achieve the best outcome, and maintain relationships. Within the day we had confirmed that the claim would be covered under the terms of the policy, enabling the agency to start discussions with the printers to establish whether there was any way of salvaging the print run – and if not, how a reprint could be delivered to schedule. A small amount of the material already printed was found to be salvageable and some savings identified, but a major reprint was necessary.
The printer’s costs would usually be paid by the agency’s client so there was no direct line of credit between the creative agency and the printer. Due to the very high cost to the printer of ordering in replacement paper for the reprint and the tight deadline, the agency was concerned that the printer would not be comfortable fulfilling the request without further assurance of payment.
At the request of the agency Hiscox contacted the Financial Director at the printers, agreed an interim payment which was made within the day and guaranteed payment of the balance in order to secure the reprint within the very tight deadline.
With the support of Hiscox’s fast and flexible response, the reprinted brochure was delivered to the end client on schedule. The end client was made aware only that a mistake had been picked up at print stage which had been corrected immediately, and their relationship with the agency was preserved.
For more from this series visit our Media in Focus hub
Find out about our specialist media cover on our Hiscox Professional Indemnity Insurance page